30
Inside the Anglo auction
32
Video store holdouts
50
Foreign guarantors: Worth the risk?
64
Roommate ads get day in court
109
Kleiers’ new novel: like ‘Sex & City,’ minus sex
THEREALDEAL
Vol. 9 No. 10 October 2011 $3.00 N EW YO R K R E A L E S T A T E N E W S Playing out FACT the ‘what ifs’ In 2011, Canadians have poured
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Wall Street loses its grip
Assessing best & worst cases for NYC’s real estate market
BY C. J. HUGHES If another full-blown recession hits, NYC could see massive residential price drops and “zombie” office towers. But if a stimulus is passed or the European crisis clears, the real estate climate here could drastically improve. Inside: 10 “what ifs” for the NY market. See story on page 40
Real estate’s toughest boss
Hot-tempered finance honcho Howard Michaels is on a roll BY CANDACE TAYLOR Howard Michaels, founder of the Carlton Group, the real estate advisory firm, FEATURE STORY is having a blockbuster year, with billions in deals so far. But working for him is no picnic: His temper has earned him comparisons to Ari Gold, the brash talent agent on “Entourage.”
How a weakening financial sector may drag down NYC real estate further
See story on page 52
BY LEIGH KAMPING-CARDER, ADAM PINCUS AND C. J. HUGHES In the last few weeks, as many of the big banks have been besieged by bad news, the question has become: Will a new round of Wall Street pain trickle down to New York’s already vulnerable residential and S PECIAL commercial markets? Indeed, the financial firms are known for filling big blocks of Manhattan offices, and their employees are the darlings of the
residential luxury market. But there are signs that Wall Street is loosening its grip on the city’s economy as financial firms shed jobs and, in some cases, put sublease space on the market. This month, The Real Deal breaks down all of that, plus looks at the ManR EPORT hattan properties that Wall Street’s biggest tycoons, from Lloyd Blankfein to Jamie big See stories beginning on page 44 Dimon, call home.
Top tweeters
A new club for NYC brokers: Those with 1,000 followers
Shaping skylines: It’s (David) Childs’ play
BY JULIA DAHL To tweet or not to tweet. That is the question for many NYC real estate pros. Some savvy brokers and executives have emerged as the industry’s top tweeters, racking up thousands of followers at a time when the average residential broker has only around 100. Find out who’s in the 1,000-plus club and what their secrets are for parlaying tweets into real estate deals.
See page 110.
See story on page 38
PHOTO CREDITS ARE HERE
$2 billion into NYC properties, more than investors from any other country, according to Real Capital Analytics. See page 66.
AT A GLANCE Sales see uptick, no thanks to low rates Manhattan residential sales activity jumped 16 percent in the third quarter over a year ago, partly due to artificially small numbers in 2010. Record-low interest rates have little to do with buyers’ decisions and could even hurt the market, some experts say. See pages 16, 18.
Clearing the FiDi fog Brokers in the Financial District are joining forces to tackle problems with transparency they say exist in the residential market there. See page 34. John Jay College’s new 11th Avenue building.
Small investors chip in for buys
Syndication deals on rise
BY JANNA HERRON Small-time investors are increasingly pooling their money to buy or build NYC properties. And they often have a leg up over traditional investors who can’t get financing. See story on page 28
The $15 billion enigma
Eastdil Secured manages to stay out of spotlight, despite leading pack in brokering investment sales
BY ADAM PINCUS Google’s record $1.8 billion purchase last year of 111 Eighth Ave. put the name Eastdil Secured on the lips of everyone in NYC Eastdil $4.5B real estate. But the low-profile real estate CBRE $3.6B investment banking firm, which managed C&W $1.7B the sale, typically doesn’t have the same vis(Source note: see page 63) ibility as its rivals. That’s despite doing $15 billion in sales nationally last year and leading the brokerage pack in New York this year, thanks to top-gun brokers Doug Harmon and Adam Spies. Still, the firm is lagging overseas, where the competition is heating up. Top brokerages for NYC investment sales this year
See story on page 62
Going for big and bold on 11th Avenue John Jay’s new 11th Avenue building is a bold addition to the Upper West Side, says critic James Gardner. While the Skidmore, Owings & Merrilldesigned tower may lack the beauty of some of the firm’s other projects, it makes up for it in character. See page 60.
Coney Island’s roller-coaster ride While Coney Island has clearly come back from the dead, the real estate market there has been held back by the slowdown. See page 68.
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WALL STREET ILLUSTRATION BY PETER BONO; DAVID CHILDS PHOTOGRAPH BY MARC SCRIVO; PHOTOGRAPH OF JOHN JAY BUILDING BY DEREK ZAHEDI